Tesla — Champion In Crisis Management
Credit to Author: Maarten Vinkhuyzen| Date: Thu, 22 Aug 2019 05:00:38 +0000
Published on August 22nd, 2019 | by Maarten Vinkhuyzen
August 22nd, 2019 by Maarten Vinkhuyzen
Years ago I switched from a small (7 person) software development team to a larger (70 persion) software development team. The products both teams maintained were nearly identical, in function, size, number, and type of users.
The planning of the small team was: “It is ready when it is ready.” The large team was ISO certified and their software development was always within budget and time. Because the same market and government regulations dictated the software development, the team’s outcomes were very comparable.
The large team was an example of software development as it should be. The small (and young) team was a constant source of irritation for management because of its inability to predict costs and necessary development time. The large team, however, produced the same functionality in 4 times the time for 10 times the price. And working in the small team was a lot more fun.
Tesla is still like the small and young team. It lacks the time and money to do things the established way. I think many Tesla business processes are a long way from the practices described by ISO 9000 or ITIL. Nor do they look like the planned and managed way of auto manufacturing made famous by Toyota.
In a lot of ways, Tesla operates in the same manner as the contractors building GF3 in Shanghai. While the architects and engineers are making the blueprints, the builders are placing pylons in the ground. Don’t be surprised when the roof is placed before the blueprints detailing how it gets finished.
It is the Silicon Valley mentality of starting ASAP and solving any problems along the way. “The impossible we do at once, miracles will take a little longer.” It is fast. After the first iterations, the quality will be what is needed. The costs are a lot lower than any legacy manufacturer can dream about, but the process is the nightmare of any normal manager.
Sometimes it goes wrong, like in the first quarter of this year, when: 1) the suspension of the Trump trade-war tariffs accelerated deliveries to China, 2) European logistics were not really ready for the avalanche of Model 3s, and 3) the much needed upgrades of the S & X production lines intersected with a drop in demand for the more expensive models.
A more experienced company sticking to its planning would just have paid the tariffs, lacking the flexibility to adjust to the changing circumstances. Tesla went with the flow and dealt with it. It was panic on the financial markets, but not at Tesla.
This makes Tesla the champion of crisis management. Because it sucks at planning, and doesn’t have the money for it. In the end, you can do more with less in trying times when being nimble and frugal.
Let’s just say this is not fair to all of the large corporations with lots of ISO9000 and ITIL certifications, companies which are moving like glaciers and trying to keep pace with a mountain stream tumbling over the cataracts.
Maarten Vinkhuyzen Grumpy old man. The best thing I did with my life was raising two kids. Only finished primary education, but when you don’t go to school, you have lots of time to read. I switched from accounting to software development and ended my career as system integrator and architect. My 2007 boss got two electric Lotus Elise cars to show policymakers the future direction of energy and transportation. And I have been looking to replace my diesel cars with electric vehicles ever since. And putting my money where my mouth is, I have bought Tesla shares. Intend to keep them until I can trade them for a Tesla car.